Six-figures. That's what a rogue manager can cost you in punitive damages if he accidentally blows a call that HR would have caught. It's surprisingly easy for an untrained manager to step in it. We've written about a couple examples.

Don't add zeros to an employment claim.

Train your folks on your EEO and anti-harassment policy. Training, plus a solid EEO and anti-harassment policy, may give you a strong defense against punitive damages.

Never training your employees on your EEO policy strips your defense. In EEOC v. Service Temps, the company had never trained its folks. The EEOC latched onto that. At trial, the EEOC secured $68,000 in punitive damages and an injunction that imposed mandatory training. The Fifth Circuit refused to overturn the award.

Over the past couple years, your company may have pushed training to the backburner. The Fifth Circuit and Texas Supreme Court may have just sent you a friendly reminder to put training back on the agenda.

The EEOC's Houston office recently told KHOU that its annual number of new harassment complaints has doubled since 2005. KHOU wrote an article about it. Notice how the on-line article has a hyperlink to "How to file a charge with the EEOC."
What do you think caused the increase in harassment complaints? More harassment? More dollars cranked into the EEOC's budget for investigators and publicity?

Plaintiffs' lawyers usually hate arbitration. That's why some companies have arbitration policies for employee disputes--thin the ranks of lawyers willing to sue. The trick is writing your arbitration policy so that it's enforceable.

In Datamark, an employee challenged her employer's arbitration policy because it had a huge hole. It was written so that the company could back out of its promise to arbitrate disputes by changing or revoking the policy just before an employee filed a claim. The policy even said the company could revoke or change it at any time without notifying employees. Worse still, these changes would apply to all employee disputes going forward. Good argument under Texas law.

The Texas court of appeals sided with the employee. The company had banked on its arbitration policy to put the dispute in front of a neutral arbitrator. Instead, the company got stuck with an employee-friendly El Paso jury. And it was on a pregnancy discrimination claim to boot.

A few tweaks to the policy would have landed the employee in arbitration. Back in 2002, the Texas Supreme Court approved of Halliburton's arbitration policy that let the company revoke or change it. The difference is that Halliburton's policy promised to give employees ten days' written notice of any changes. Any claims filed during those ten days would be resolved using the old policy. Halliburton got it right; so can everybody else.

An EEOC investigation can't force a company to pay a complaining employee, but can hurt your defense at trial. The EEOC can end its investigation by writing a nasty determination letter which says your company is probably guilty of discrimination. And juries eat it up.

An ex-employee who had an EEOC determination letter recently struck gold at trial. InTexas Department of Public Safety v. Williams, the jury awarded the ex-employee $619,801. Ouch! On appeal, the DPS tried to overturn the award because the trial judge let the EEOC determination letter into evidence. Texas courts first presume that a jury should see a determination letter. To exclude a letter, an employer must show that it contains only bald conclusions. No such luck for the DPS here. The letter had enough details about the EEOC's investigation and evidence to satisfy the court of appeals.

Think carefully about how you handle EEOC investigations. You can feel the consequences years later in front of a jury.